© Peter Cardillo
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Talking about the Euro zone currency, I believe we are probably looking at 1.25 within the next several months. Mario Draghi surprised at the ECB Press conference last week amid the overall expectations in the market. However, the established situation is not really a full-blown Quantitative Easing like in the US. Nevertheless, I consider it to be a certain step into the right direction. In my opinion the Euro is overinflated in terms of the economic conditions. One of the reasons behind that is the economic condition itself, besides the structural reforms. Hence, an expensive Euro has been a drag on any real turnaround in the Euro land.
What else in your opinion could help the economic growth? And what could possibly ruin Draghi's plans?
To my mind, the real emphasis was on reforms in many provincial nations such as Spain, Italy and others. In case Europe gets some sort of threat from the Russian-Ukraine conflict escalation, it would be helpful for the economic growth. However, it is a question of confidence (which is certainly lacking) due to the high rate of unemployment in Europe, which is very difficult to turn around, unless reforms will be pulled out.
What is your forecast for the EUR/USD and the EUR/JPY for the end of the year?
We expect to see the EUR/USD trading at 1.25 by the end of 2014. Regarding the EUR/JPY a 3% decline is expected for the rest of the year.